The Dow Jones Industrial Average gained 416 points Wednesday as recession fears eased and strong corporate earnings buoyed stocks. File Photo by John Angelillo/UPI | License Photo
Aug. 3 (UPI) -- U.S. markets rallied on Wednesday after falling for two straight days to open the month of August as recession fears eased.
The Dow Jones Industrial Average rose 416.33 points, or 1.29%, while the S&P 500 gained 1.56% and the Nasdaq Composite climbed 2.59%.
Wednesday's gains came as economic data showed that the U.S. services sector was on the rise in July, with the ISM Services PMI hitting 56.7, an unexpected increase from June's reading of 55.3.
The data indicated that supply chain issues that had weighed on the economy had been resolved and a recession was not unavoidable.
St. Louis Federal Reserve President James Bullard also sought to allay recession fears Wednesday as he said the United States can avoid a recession amid rising interest rates.
"I think we'll probably have to be higher for longer in order to get the evidence that we need to see that inflation is actually turning around on all dimensions and in a convincing way coming lower, not just a tick lower here and there," Bullard said during a TV interview with CNBC.
Corporate earnings also continued to come in with shares of drugstore chain CVS rising 6.3% as it posted better-than-expected earnings and elevated its full-year guidance, while Starbucks stock rose 4.25% as it largely surpassed earnings expectations.
Chipmaker AMD, however, missed earnings estimates, sending stocks falling 1.21%.
Disney stock rose 4.11% while Apple gained 3.82% to lead the Dow, seemingly boosted by positive market sentiment as overall earnings have been more positive than analysts anticipated.
Earnings have helped lift major indexes out of a bear market with the S&P 500 up 14% from its recent intraday low in June, while the Nasdaq has risen to its highest levels since May.